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BT has signed contracts with four of its preferred suppliers for its £10bn next generation network, the UK's dominant fixed line telco announced today.

Negotiations have been inked between BT and Ciena, Huawei, Lucent and Siemens and the giant telco expects to conclude negotiations with the four remaining suppliers - Fujitsu, Alcatel, Cisco, and Ericsson - early in the New Year.

As part of its 21CN strategy, BT plans to phase out the UK's public switched telephone network (PSTN), replacing it with a multi-service internet protocol (IP) based network which will carry both voice and data services.

As well as paving the way for a string of new hi-tech applications, 21CN is also expected to deliver cash savings of £1bn a year to BT by 2009.

The firm is already testing the service and has so far clocked up six million customer calls carried in the latest phase of its 21CN trials. The migration of customer lines to the new infrastructure is expected to begin in Cardiff during the second half of 2006.

Said BT Wholesale chief exec Paul Reynolds in a statement: "21CN represents one of the biggest ever investments in the economic infrastructure of the UK by a private company. It will provide the basis of the most powerful competitive and productive communications environment in the world."

BT announced details of its eight preferred suppliers in April. The one name left off the list was was Marconi, whose shares nose-dived after it failed to win a slice of the £10bn contract. As a result the firm culled some 800 jobs and in October, most of the business was sold to Ericsson for £1.2bn. ®